Hopefully, you are just asking this for curiosities sake and not because you are actually facing a judgement. However, if it appears that a judgement is indeed in your future, it is very important to understand the circumstances leading up to this, the process which follows, and what happens after the judgement is granted.
So, what is a judgement anyways?
In point of fact, a judgement is the final effort of a creditor to collect a debt owed. Prior to reaching this point, many things have likely transpired.
To begin with, you have entered into an agreement with a creditor to purchase an item and pay for the item at a later date, normally through installment payments. Or, alternately, you may have purchased an item using a credit card and, subsequently, owe the credit card company for the funds, or credit, fronted for the purchase of the item.
So, at this point, you have purchased your item and taken it home to enjoy. Unfortunately, the week following your purchase, you are laid off from work due to the economy! You, of course, are confident that you will be able to find another job quickly. However, after four months of diligently searching, it becomes evident that you were mistaken.
Now, you have creditors calling constantly and are receiving what seems to be a barrage of daily written demands from those same creditors for payment.
Most likely your creditor has attempted to contact you to try to negotiate a payment plan. In the beginning, he may have been sympathetic and understanding; however, as time continued to march by, he likely became less so. Eventually, your creditor will probably become tired of using his financial resources and time to collect the debt.
After several months, your creditor may decide to file a legal suit against you to compel you to pay the debt. (Unfortunately, I must note at this point that when you entered into the agreement with the creditor or the credit card company, you likely signed a written contract which gave the creditor or credit card company the right to sue you if you defaulted on your payments.)
With this legal suit, your creditor will attempt to gain a “judgement” against you by proving that the debt is legitimate and that you owe the sum due.
Getting Served with Papers
Many people become worried and anxious when they are served with legal papers. Many even contemplate not showing up at the court hearing. Far too many times, people, in fact, do not appear for the court hearing. This is a HUGE mistake! By not showing up, you automatically default (lose) the case precisely because of your absence.
If the case does make it to court and you end up losing, your creditor will be granted a judgement against you for the amount of the debt and you will be served with a Notice of judgement. This Notice of judgement will allow you 30 days to pay the debt in full.
If the debt is not paid within 30 days, the creditor will be able to take certain actions against you in order to collect the outstanding debt. Some of the legal remedies which the creditor may be able to utilize include garnishment of wages, liens against real property, and seizure of assets.
It is important to understand that if a judgement is issued against you, your credit score will be drastically affected. In fact, it will likely plummet if a judgement is rendered in your creditor’s favor.
It is best to try to negotiate with your creditor so he does not decide to pursue a court-ordered judgement.
And, in the worst case scenario, if you do get a judgement on credit report, you can always legally file a credit report dispute against any questionable judgement and possibly remove judgement from credit report.
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